Making up a large part of the industrial realm that forms much of Dearborn’s south end, has been a silent but integral part of the city’s economic revival.
That trend continued this month when the Russia-based manufacturing company, which shares space with the Ford Rouge plant and supplies high-grade steel to companies internationally, secured approval of two state brownfield tax credits valued at $10 million and $1.25 million, and a state tax capture valued at $19.4 million.
Approved by the Michigan Economic Growth Authority, the credits support the $1.3 billion investment Severstal has made in upgrading its manufacturing facilities. Part of that, explained Dearborn Economic and Community Development Director Barry Murray, includes adding facilities for making steel products that meet the high standards auto manufacturers require for the quality of their car parts. Many of those upgrades have been under way for years.
“They started a very ambitious program to modernize that plant, which … was built in the 1920s,” Murray said. “Severstal started five years ago, and they’re adding two plants … which are finishing plants that are going to make products that come out of this mill globally competitive where they weren’t before.”
Mayor John B. O’Reilly Jr. said MEGA’s approval of the latest Severstal project is positive news for Dearborn.
“Severstal represents a significant portion of our tax base and the company’s investment in our community is of tremendous benefit for our long-term economic health,” O’Reilly said. “We’re grateful for their continued commitment to our city.
“And Severstal really is a success story, and illustrates the benefit of government and business working together to achieve our shared goals.”
The tax credit and tax capture approved on March 15 will support Severstal’s construction of a high-speed Continuous Annealing Line, capable of producing advanced high-strength steel at its Dearborn facility.
The project includes demolition, removal of debris, rerouting utility lines and asbestos removal.
Severstal chose Dearborn for the site of the Continuous Annealing Line over its facilities in Maryland, Mississippi, Ohio and West Virginia.
Continuous Annealing is the process of heating and cooling strips as they pass through a process facility. It is a powerful tool for the generation of advanced high-strength steel because very high cooling rates rate can be achieved.
More than an economic uptick, the city estimates that Severstal’s investment in Dearborn represents the creation of 146 full-time positions, in addition to its 1,600 employees at the site. It is also estimated the overall investment will produce 3,500 jobs during the construction and installation of the improvements.
O’Reilly said the success story is just one of many economic projects the city has been working on, and that they seek all possible support for their efforts to see them through.
“We seek to find all possible resources to support economic development projects in Dearborn,” said O’Reilly. “For instance, Congressman John D. Dingell has been working with us and Severstal to secure Department of Energy support for this project.”
Murray adds that Severstal’s success has been one of the largely unsung heroes of maintaining manufacturing jobs in Dearborn.
“To me, that’s an incredible story that we don’t talk about very much, but there’s about 2,000 jobs in that mill that were one day away from being gone if they hadn’t been purchased by Severstal and had this kind of investment made in it,” Murray said. “You can see steel mills all over the country that are shuttered. There’s only two steel mills left in Michigan–this one and the one on the Detroit River in Ecorse, United States Steel.”
Moreover, the steel Severstal will be producing is in high demand from auto companies looking to reduce weight and improve fuel efficiency in vehicles.